The Impact of Open Enrollment on Employee Retention and Satisfaction
Open enrollment is more than just a yearly task for HR teams; it’s an important moment that has a direct impact on both employee retention and employee satisfaction. This is when employees evaluate their benefit options and their employer’s commitment to helping them ensure their and their loved one’s health and financial well-being.
A smooth, transparent open enrollment process combined with clearly communicated and defined benefit options can strengthen employee loyalty. Poorly executed open enrollment can cause more frustration than satisfaction among your employees, potentially driving your best workers to seek new employment elsewhere.
If you are aiming to retain top talent, open enrollment is a strategic tool. Here’s how it shapes employee retention and satisfaction.
The Role of Benefits in Employee Retention
It’s no surprise that benefits play a key role in employee retention. A survey from Gallup found that nearly 20% of employees would leave their current role for better benefits. Employee retention is increasingly tied to a strong benefits package. Benefits aren’t just perks—they’re a reflection of how much an organization values the health and well-being of its employees.
When benefits are aligned with what employees need to stay happy, healthy, and productive, employees are more likely to stay. When benefits are communicated, employees have a better understanding of how their benefits work to protect their own physical and financial health. Poorly communicated benefits lead to confusion. Well-communicated benefits lead to better benefit decisions, and happier, more secure employees who feel valued by their employer. Gallup’s survey on employee retention and benefits provides more insight into how employees perceive benefits and their impact on retention.
How Open Enrollment Directly Impacts Employee Satisfaction
The way employees experience open enrollment directly affects their satisfaction with their employer. According to a study from SHRM, 73% of employees said they don’t feel educated enough about benefits and want more education on benefits offered.
This is why the open enrollment process is so important, because it has a direct impact on employee perception. It’s an annual window of time when your existing workforce learns about the benefits their employer offers, and evaluates how much their employer cares about them based on their understanding of those benefits
Benefits, in particular health and wellness options, are one of the top reasons employees feel content in their jobs. When employees understand their benefits and feel supported during open enrollment, their confidence in their employer grows. Clear and easy-to-understand benefits communication builds trust, while confusion and frustration lead to dissatisfaction. For more about satisfaction and the role of benefits, check out our recent blog posts by clicking here.
The High Cost of a Poor Open Enrollment Experience
What happens to an organization when its open enrollment process is poorly managed? Nothing good. Organizations face more than just minor inconveniences—they face higher turnover and lower employee engagement. Here’s how a bad enrollment experience impacts a company:
- Increased turnover: Employees who are unhappy with their benefits or who don’t understand their options are more likely to leave for an organization that offers better clarity and benefits.
- Increased cost: The price tag for employee turnover is high. According to some studies, the cost of replacing an employee can range from 10 to 30% of their annual salary. This cost varies based on factors such as the industry and the employee’s tenure.
- Lower engagement: Confusion and frustration with benefits lead to disengagement at work, affecting productivity and morale.
- Costly utilization or no utilization: Confusion and frustration can result in either costly or no utilization of those benefits. For example, an employee may go to the emergency room for a stomach virus instead of using a telemedicine provider, or an employee may not seek treatment at all for an illness or injury due to perceived cost.
- HR burden: When employees are confused about their benefits, HR teams are left to field more questions and fix mistakes.
For companies that want to keep their employees satisfied, this is a problem that can’t be ignored. On the flip side, clear benefits communication during open enrollment can help prevent these issues and ensure employees feel valued.
What Employees Want from Open Enrollment
Employees don’t just want options—they want clarity and relevant choices. Here’s what makes the open enrollment process satisfying for employees:
- Simplicity: Employees want a straightforward process—no jargon, no confusion. They want to easily compare benefits and choose what works best for them and their families.
- Personalized options: Employees expect benefits that align with their personal needs, whether it’s health coverage, wellness programs, or retirement plans.
- Easy access to information: They appreciate user-friendly self-service portals, helpful webinars, and opportunities to get answers to questions quickly.
By focusing on these areas during open enrollment, companies can improve employee satisfaction and reduce turnover.
How VSMG Improves Open Enrollment to Boost Retention & Satisfaction
At VSMG, we understand that open enrollment is more than just paperwork. It’s an opportunity to build a relationship with your employees through clear, transparent benefits communication. Here’s how we can help:
- Simplify enrollment: We provide easy-to-understand options that reduce confusion and improve participation.
- Increase participation: By educating employees about their options and the value of each benefit, we encourage active engagement.
- Boost retention: When employees feel informed and supported during open enrollment, they’re more likely to stay with the company long-term.
Our approach makes sure that employees don’t just go through the motions of selecting benefits. We want your team to feel confident in their choices and valued by your organization.
Contact us today to learn how VSMG’s better advice and better benefits can help support your organization and your employees’ well-being.
